Shoe sales defy general retailing gloom

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The DIY, furniture and carpet sectors are suffering in the recession as the CBI today said retail sales fell for the third month in a row.

The business lobby group revealed that 47 per cent of retailers said sales volumes were down in the year to July, against 32 per cent reporting an increase.

The resulting balance of minus 15 per cent was slightly better than expected, but firms indicated they were braced for a slightly heavier fall of minus 23 per cent in August.

Grocery stores continued to see strong growth on a year ago, while the only other sector to improve was footwear and leather, with a balance of plus 64 per cent.

Falling sales were reported by retailers of hardware, china and DIY, and furniture and carpets, but the decline in durable household goods was slower than the heavy falls seen in the past year.

The CBI's distributive trades survey is gloomier than figures from the Office for National Statistics, which said volumes rose 1.2 per cent between May and June.

Andy Clarke, chairman of the CBI distributive trades panel, said: "Many retailers are having a difficult summer and no pick-up is expected in August.

"But the overall sales falls are not as heavy as we saw at the start of the year, and some retail sectors are reporting growth. The recent sharp rise in unemployment will worry many consumers, and is likely to constrain sales growth in the months ahead."

The survey was conducted between 24 June and 15 July, with 145 firms taking part.

Vicky Redwood, UK economist at Capital Economics, said: "Overall, retail sales are still holding up pretty well. However, we remain nervous about what might happen once the support from the good weather fades and the drag on household incomes from rising unemployment and slowing pay growth intensifies."